Reports from the Economic Front

a blog by Marty Hart-Landsberg

Anger and Confusion

Everyone is angry about the big salaries CEOs have been drawing despite the Great Recession that has left almost everyone else struggling and scared.

The anger is understandable—check out the AFL-CIO’s executive paywatch site.  There you will see the following:

Bank of America Corp.
Thomas Montag
2009 Total Compensation: $29,930,431

JPMorgan Chase & Co.
James Dimon
2009 Total Compensation:
$9,274,494

Citigroup Inc.
John Havens
2009 Total Compensation: $11,276,454

Morgan Stanley
Walid Chammah
2009 Total Compensation: $10,021,969

The Goldman Sachs Group Inc.
Lloyd Blankfein
2009 Total Compensation: $9,862,657

Wells Fargo
John Stumpf
2009 Total Compensation: $21,340,547

It helps to put these compensation numbers in a bit of perspective.  If you were to earn $100,000 a year, it would take you 90 years of work to make $9 million dollars, which is still less than what any of the above made in just one year.

But, to a large extent, our anger at these people and their earnings is all very acceptable to those who profit from the status quo.  That is one reason that the media is willing to give visibility to (or actually encourage) the public anger over the issue.  Lowering executive salaries will do little to change the dynamics of a system that resists labor law reform, promotes free trade agreements, champions war spending, seeks privatization, ignores income inequality, and welcomes cuts in public services, etc.

Yes, we should be mad, but we need to focus our anger at the structures that really shape our lives.  In this regard, it is depressing to read what Andrew Kohut, president of Pew Research Center, has to say about the results of a series of recent Pew surveys.

In short, the surveys show that people are increasingly blaming the government for our problems and viewing a smaller, less interventionist public sector as the answer to our problems.  While existing government programs and policies are far from perfect, this perspective is a recipe for far greater suffering.  Afterall, the smaller the government, the more powerful business becomes.

Here is a sample of what Pew found:

By almost every conceivable measure, Americans are less positive and more critical of their government these days. . . .

As in the past, poor performance is the most persistent criticism of the federal government. But increasingly Americans say that government has the wrong priorities and that has a negative effect on their day-to-day lives. Sixty-two percent say that government policies unfairly benefit some groups, while nearly as many (56%) say that government does not do enough to help average Americans.

There is also growing concern about the size and power of the federal government. The public is now evenly divided over whether federal government programs should be maintained to deal with important problems or cut back greatly to reduce the power of government.

A desire for smaller government is particularly evident since Barack Obama took office. In four surveys over the past year, about half have consistently said they would rather have a smaller government with fewer services, while about 40% have consistently preferred a bigger government providing more services. In October 2008, shortly before the presidential election, the public was evenly split on this question.

The public is now divided over whether it is a good idea for the government to exert more control over the economy than it has in recent years. Just 40% say this is a good idea, while a 51% majority says it is not. Last March, by 54% to 37%, more people said it was a good idea for the government to exert more control over the economy. The exception here is the undiminished support for the government to more strictly regulate the way major financial companies do business. This is favored by a 61% to 31% margin.

We have a lot of work to do.

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